Aspen might give property owners a break
November 25, 2007
ASPEN ” Aspen residents will likely get a break from what would have been the largest single-year property tax increase in the city’s history.
The City Council is expected to vote Monday to give property owners a temporary property tax credit that, if passed, will slightly reduce what could have been more than a 45 percent increase.
The city’s current mill levy rate is $5.41 for every $1,000 of assessed property value; voters approved the rate in 2005 and it lasts through 2010. They also approved using any excess property tax proceeds to pay for sidewalk improvements, new hybrid buses and an outdoor pool.
The City Council was poised to approve the maximum mill levy to pay for those projects on Nov. 12, but dozens of property owners said such an increase would cause financial harm, especially to those on fixed incomes.
In response, city staff members have proposed temporarily reducing the mill levy by .481 mills, which would mean a $591,741 reduction in what City Hall could collect in property tax revenues for 2008.
If the council approves the reduction, property tax revenue for 2008 would be $6,066,188, which would be enough to cover the previously voter-approved projects, according to City Finance Director Paul Menter.
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Of that amount, $1,384,852 is excess revenue that can only be used for voter-approved projects. The rest of it ” $4,681,331 ” can be used for general purposes.
The city of Aspen is one of 18 taxing districts in Pitkin County that voters have allowed to be exempt from TABOR, a state law that requires government to lower its tax rate when property values rise. When property tax revenues exceed the constitutional limit, those taxing districts, including the city, can choose to keep the windfall, lower the mill levy or provide a temporary tax credit to property owners.
Some Aspen home and business owners have argued that City Hall doesn’t need to take full advantage of its windfall; they may argue Monday that the proposed reduction isn’t enough.
Mike Maple, who owns a home on Mountain View Drive, said the proposed tax increase would be greater than the city property tax increases experienced over the last 15 years combined.
“Although I commend City Council for taking less than all of the windfall tax increase created by the escalating values, I suggest the City Council consider adjusting the mill rate to create a property tax increase of ‘only’ 15 percent (4.28 mills),” he wrote in an e-mail to the City Council on Nov. 20. “Yes, as a community we have voted to de-Bruce many of our local property taxes to allow taxing authorities to retain revenue in excess of inflation but that does not entitle taxing authorities to take such a windfall off the backs of Aspen property owners and businesses.”
Mayor Mick Ireland said going against what the voters approved in 2005 to fund sidewalks, hybrid buses and an outdoor pool at the Aspen Recreation Center with excess tax revenues would be disingenuous.
The City Council in 2006 directed staff to “front load” more than $1 million in sidewalk and American with Disabilities Act improvements. Collection of the excess property tax revenue would allow City Hall to fund those projects with cash and avoid borrowing money to pay for them.
With a slight reduction in the mill rate for one year, that can still happen, said City Councilman Jack Johnson.
“I feel completely comfortable to take that excess money and fund those projects,” he said. “It’s our intention to give some money back, but we need a healthy reserve to finish these projects.”
The city of Aspen’s portion of revenues is 20 percent on a property owner’s tax bill. Johnson said citizens ought to go to the other taxing authorities and ask them to reduce their mill levy rates as well.
In 2007, assessed valuations in the city of Aspen have increased 45 percent ” with a total of $1,230,669,800 in total property value.
Another 20 percent increase could happen next year, according to the Pitkin County Assessor’s Office. And unless the other taxing districts, including Pitkin County, the Aspen School District, the hospital, the town of Snowmass Village, Colorado Mountain College, and the Aspen Ambulance and Aspen Fire Protection districts, make adjustments to their mill rates, property taxes across the board could increase as much as 45 percent ” in excess of $25 million, according to Maple.